A whole lot of nothing: Mark’s top articles in August
Morningstar’s Director of Personal Finance covered the short lived market meltdown, why you should copy professional fund managers and the capital cycle.
As August draws to a close it looks like the ASX 200 will finish slightly down for the month. In the US the S&P 500 will likely close slightly up. And this is typically what markets do. They meander around in a generally upwards direction.
Given where we ended the month it is hard to believe how August started. I was sent the following picture by a reader at the beginning of the month:
Remember this? According to some media outlets we were on the precipice of a repeat of the 1929 stock market crash.
I wrote an article to try and make sense of the explanations for the plunge in share prices. I argued the underlying facts about the economy in the US and the commercialisation of AI hadn’t changed. Investors had just decided to start worrying more about them. Over the course of the month they still haven’t changed. Investors simply moved on and fixated on something else.
If a person behaved like the share market they would probably be thrown in the looney bin. And as investors we tend to get swept up in the drama. That is to our detriment.
Appropriately enough I started the month writing about the book The Psychology of Money. And if you believe like I do that financial outcomes are more a product of how you invest than what you invest in you will love the book.
If you follow market commentary you probably heard accounts of how professional portfolio managers were reacting to the volatility. They likely made compelling arguments on the merits of however they were positioning their portfolio. Perhaps you were tempted to make changes to your own portfolio. I think that following the approach of professional investors is a bad idea. I’ve wanted to write this article for some time and finally outlined 5 things that professional investors do that you shouldn’t.
There was one day during the month I was happy to pick up the newspaper. Below is the front cover of the AFR featuring none other than my friend and colleague Shani Jayamanne. I’m very proud of her. You can read her monthly wrap here.
And finally, I tackled the capital cycle in two articles. Part one looked at the lessons learned from two historic bubbles. Part two looked at two potential bubbles we are currently facing that investors may want to avoid.
This month we started a new feature where I answer questions from readers. You can email me at [email protected] if you have a question and read my answers to questions on annuities, ETFs and global investing.
Articles mentioned
- The Psychology of Money teaches us the only thing holding us back is ourselves
- What is happening in markets and what you should do now
- 5 things professional investors do that you shouldn’t
- What is the VIX and why do investors care about it?
- ETF deep dive: VDHG the multi-sector offering from Vanguard
- Scepticism can be beneficial when navigating the capital cycle
- Are you better off in direct shares instead of ETFs?
- Are these two potential bubbles that investors should avoid?
- Mark to market: Mark answers reader questions
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